As the title states - why did Nikon go with the D500 sensor in the D7500 ? It's not so much the drop in megapixels but the performance of the D500 sensor itself in all but high ISO situations that is an initial concern . From ISO 100 to 3200 , the D7200 image IQ looks slightly better to me than the D500 - and that is the range 98% of all my pictures will be taken . *All I can hope for is Nikon has some new hardware / software tweaks with the D500 sensor in the D7500 that we are unaware of as of today ... Your thoughts ?

It's a shift away from their traditional marketing/design philosophy for the DSLR.

Where DSLR's still compete strongly against mirrorless is in focus tracking and sports shooting, the D7500 has been produced as a "mini" or budget D500 for this reason.

Nikon are probably about to release a fairly high spec 24mp mirrorless camera, so an upgrade of the D7200 at this point would create a marketing and product line up dilemma.The D7000 series concept is gone, Nikon are clearly re-positioning their entire APS-C DSLR line up, most likely in anticipation of breaking into APS-C mirrorless.

You are contradicting yourself.

Obviously that mirrorless camera is not going to be APS-C, it is going to be FF. If Nikon made a APSC mirrorless who would want to waste their money on a D500? That would destroy D500 sales. That's just my opinion.